Delhi airport hikes UDF for international passengers as AERA approves nee tarriff order, BA

The Airports Economic Regulatory Authority of India (AERA) has issued its latest tariff order for Indira Gandhi International Airport, Delhi, covering the Fourth Control Period from April 1, 2024, to March 31, 2029. The new tariff structure marks a substantial revision, with aeronautical charges increasing by approximately 148 per cent, aligning with AERA’s public consultation paper published on 31 January 2025.

Under the new framework, the nominal Yield Per Pax will be set at INR360 for the remainder of the control period. This represents a significant jump from the previous INR145 under the Third Control Period. AERA’s projections indicate a steady rise in aeronautical revenue, reaching INR3,510 crore by the financial year 2028-29, supported by growing passenger traffic.

AERA has endorsed the variable tariff plan proposed by Delhi International Airport Limited (DIAL), introducing a revised User Development Fee (UDF) structure. The UDF will now be split between embarking and disembarking passengers, with distinct rates for domestic and international travellers. Business-class international passengers will be subject to differential pricing.

In a move to bolster Delhi Airport’s role as a key aviation hub and attract more long-haul international flights, AERA has waived landing charges for wide-body aircraft operated by airlines launching direct services to new international destinations.

The new order also incorporates elements from judicial rulings. Following a Supreme Court judgement from 11 July 2022, AERA has adjusted the computation of corporate tax on aeronautical earnings. Additionally, while a 21 July 2023 ruling by the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) favoured DIAL on certain critical issues, AERA has chosen to defer its implementation pending a Supreme Court decision on an appeal.

DIAL is required to enforce the revised tariff structure from 16 April 2025